Close-Up: Newsmaker - Gatfield risks it all with a new management plan

Whether you think Steve Gatfield, the Lowe Worldwide chief executive, is
barking mad or a genius for making the decision to leave his London
agency without a chief executive, you do have to admit that he's got
some balls.

Last week, the Yorkshire-born network chief forced Amanda Walsh out of
Lowe London only 15 months after hiring her.

This followed the high-profile departure of Nancy Hill, the chief
executive of the New York office, who departed towards the end of last
year and has now taken the helm of the American Association of
Advertising Agencies.

So Gatfield has lost two key chiefs in quick succession.

He brought in Walsh to replace Garry Lace, who had left the agency
following an internal investigation - a damaging set of events for the
agency's local image.

As a result, it's tempting to wonder if Gatfield's decision not to
replace Walsh is partly a result of this run of high-profile management
difficulties.

Instead, the plan in London is to hand the reins to the capable Ed
Morris, the executive creative director and famously well-paid golden
boy, and Rebecca Morgan, its planning supremo, in whom Gatfield has
extreme confidence.

Gatfield says: "Rebecca and Ed are top-class professionals who have
great front-facing relationships with clients. They're also both magnets
for talent."

However, an industry source who has worked with Morgan before, and knows
Morris well, questions Gatfield's decision, saying: "Rebecca is a
brilliant planner with a great advertising mind, but she does not lead
people well."

It could even be possible that Gatfield, who knows that Morris and
Morgan can work well together, is feeling a little gun shy about
bringing in an outsider.

Rumours abound of some very ugly, and destructive, politics in the
Sloane Avenue agency over the past few years. Insiders say that Walsh
and the agency's former marketing director Judy Mitchem were involved in
regular, long-running spats. Meanwhile, Morris and Morgan are said not
to have worked well with Walsh. Lowe has long had the reputation of
being something of a political "lions' den", so, perhaps, Gatfield feels
it best to avoid rocking the boat with a new face.

In addition, Gatfield and Tony Wright, the Lowe Worldwide chairman, will
be spending more time in London, taking on some of Walsh's
responsibilities, despite already having their own hectic schedules.

Weight has been added to Wright and Gatfield's belief that they can
handle any issues thrown up by the London office by the fact that they
have also decided to move the network's headquarters to the capital.

However, the significance of this is something that Gatfield is eager to
downplay, saying London's new role amounts to it becoming an
"administration centre".

Despite this, it can still be seen as a particularly risky move to forge
ahead with a plan to have your network hub agency running without a
domestic chief executive.

A good chief executive will not only work on high-level pitches,
schmooze top-level clients, handle regulatory issues, motivate the
troops and raise the agency's profile, but they will generally invest so
much of themselves that the business will become an extension of their
personality.

So what exactly is Gatfield thinking? Is there method in his madness? He
explains: "Agencies are being paid for selling a product, not the
old-school client servicing."

But more central to his line of thinking is the way that Lowe is
evolving as a multinational network, and not as a conglomeration of
local offices.

He adds: "We've moved a long way as a global enterprise. And as the
company evolves, so does the job. Amanda did a job for us in London, but
where we are going, a London-facing chief won't work."

Gatfield then points to the fact that most of Lowe's revenue comes from
its big international clients, such as Johnson & Johnson, Unilever and
General Motors.

"We have some domestic business, but we also have a great deal of
multinational business. This means a large part of our income is
multimarket. This is where we have to concentrate," he says.

"A large part of client movement has more than a local market focus.

When you look at Lowe London's domestic client list, you can see what
he's talking about. John Lewis is the only notable piece of
non-network-aligned business.

It is fair to say that the agency bears little resemblance to its former
self. It was the UK's second-biggest agency after its merger with Lintas
in 1999, according to Nielsen figures. Today, the shop hovers around the
20th mark, having been overtaken by the likes of WCRS, Fallon and
Delaney Lund Knox Warren & Partners.

So, instead of fighting the decline, the decision not to appoint a chief
executive appears to be giving up on London building itself back up into
the UK's top ten using local account wins.

There's a sense from Gatfield that part of his reason for not hiring a
chief executive in London is because he doesn't believe he can get a
good one. He thinks that the very best managerial talent wouldn't be
satisfied with a domestic role, or to put it another way, wouldn't put
up with constant interference from global managment. Lowe, one source
who has worked closely with the network says, is populated by very
powerful account barons.

Gatfield says: "There's a very small handful of very good people, but
they want a bigger canvas. Very few substantial agencies can throw the
keys to someone and say 'it's yours'. You can't be an island."

So what is his vision for Lowe? He sums up his masterplan by saying: "I
want it to be a truly high-value, ideas-centred, multicultural creative
network."

However, it is the final part of this statement that underpins the
thinking behind his idea.

With a focus on global accounts and new business, Gatfield believes that
drawing on skills, talent and experiences from around the globe is
invaluable.

He points at the recent $300 million Magnum ice-cream win, which
used a pitch team made up of people from different offices around the
network as proof.

The global Beck's win is another feather in his cap. For such
presentations, Lowe would assemble a team of senior talent plucked from
its Indian, Argentinian and British offices, for instance.

This has given Gatfield a recent confidence boost, and he appears
extremely upbeat about how successful his plans will be.

However, people are already beginning to wonder what his long-term plans
are. For one thing, his contract is up for renewal in April 2009, and
many are reading a lot into this date. But not Gatfield. He says: "My
plans are to continue operating in the environment I'm currently
operating in, but I haven't started having those conversations with IPG
yet." One source who knows him says that Gatfield's ambitions lie in
Asia, where he used to work for Leo Burnett.

Either way, the message for London seems to be that global management is
concerned with global revenues. And there's no doubt that without a
local chief executive, the network's key hub office will lack dedicated
management focus. Local rivals will like that.